What changed between the draft committee report and the plenary report

Removed:SHORT JUSTIFICATION

Added:Recital 15: (15) In order to ensure as much coherence as possible with existing crisis mechanisms and their requirements pertaining to the public interest and with other Union legislation, the definition of a ‘crisis-relevant product’ should be based on the definition adopted in the Single Market Emergency Instrument (SMEI) but should be more general in order to cover products related to different kinds of crises or emergencies.

Removed:The Council position at first reading reflects the agreement reached between Parliament and the Council in interinstitutional negotiations at early second-reading stage.

Added:Recital 16: (16) A Union compulsory licence authorises the use of a protected invention without the consent of the rights-holder. Therefore, it must only be granted exceptionally with the purpose of safeguarding the public interest, as a last resort mechanism, and under conditions that take into account the interests of the rights-holder. This includes a clear determination of the scope, duration and territorial coverage of the licence which are strictly in line with the duration of the crisis and the purpose for which the compulsory licence was granted. In the context of a Union level crisis mechanism, the crisis mode or emergency mode is activated or declared for a limited period of time. Where a Union compulsory licence is granted within such framework, the duration of the licence shall not extend beyond the duration of the activated or declared crisis or emergency mode and in principle should not exceed 12 months, unless a renewal is necessary due to the continued existence of the circumstances that had led to the granting of the licence. In order to ensure that the compulsory licence fulfils its objective as well as its conditions, the use of the invention should only be authorised to a qualified person able to manufacture the crisis-relevant product and to pay a reasonable remuneration to the rights-holder.

Added:Recital 18: (18) The participation of an advisory body aims at guaranteeing a comprehensive, thorough, and concrete assessment of the situation, taking into consideration the individual merits of each situation. It is therefore important that the advisory body has the right composition, expertise, and procedures to support the Commission when deciding on whether to grant a Union compulsory licence and under what conditions. Union crisis mechanisms usually include the setting-up of an advisory body ensuring coordination of action of the Commission and relevant bodies and agencies, the Council and the Member States. In this respect, an advisory group is set up under SMEI. Regulation (EU) No 2022/2371 provides for a Health Crisis Board and under Regulation (EU) No XXX/XX (Chips Act) [COM/2022) 46], the Commission relies on the Semiconductor Board. Those advisory bodies have the right composition, expertise, and procedures to address the crises and emergencies for which they have been set-up. When compulsory licensing is being discussed in the context of such crisis instrument, relying on the advisory body set-up for the specific instrument allows the Commission to be adequately advised and avoid duplication of advisory bodies, leading to incoherences between processes. The competent advisory bodies should be listed, together with the corresponding crisis mechanisms, in an Annex to this Regulation. The Commission should ensure that representatives of other crisis-relevant bodies at Union lev…

Added:Recital 19: (19) The role of the advisory body is to advise the Commission when discussions arise on the need to rely on compulsory licensing at Union level. It should provide the Commission with a non-binding opinion. Its main tasks include assisting of the Commission in the determination of the necessity to rely on compulsory licensing at Union level, and in the determination of the conditions for such licensing. When the advisory body is already set up, its existing rules of procedure should apply. As regards ad hoc advisory bodies, they should be composed of those representatives of national competent authorities in order to provide the Commission with information and input concerning the situation on the national level, including information on manufacturing capacities, potential licensees and proposals for voluntary solutions. In addition, the advisory body should have the function of collecting and analysing relevant data, as well as ensuring coherence and cooperation with other crisis relevant bodies at Union and national level in order to ensure an adequate, coordinated and coherent crisis reply at Union level.

Added:Recital 20: (20) The Commission should grant the Union compulsory licence in the light of the non-binding opinion of the advisory body. Persons, in particular the licensee and the rights-holder, whose interests may be affected by the Union compulsory licence should be given the opportunity to submit their comments, within a reasonable timeframe, to the advisory body upon receiving the case file and analyses presented to or conducted by the advisory body, and be provided with any other pertinent information they require for their evaluation of the potential repercussions of a proposed Union compulsory license on their intellectual property rights. These elements should enable the Commission to consider the individual merits of the situation and determine, on that basis, the adequate conditions of the licence, including an adequate remuneration to be paid by the licensee to the rights-holder. To avoid overproduction of products manufactured under a Union compulsory licence, the Commission should also consider any existing compulsory licences at national level.

Added:Recital 21: (21) The Commission should guarantee that the rights-holder has the right to be heard before the adoption of the Union compulsory licence. Therefore, the Commission should inform the concerned rights-holder, individually, without undue delay that a Union compulsory licence might be granted. The involvement of the rights-holder should be possible once there are ongoing advanced discussions in the relevant advisory body as regards the granting of a Union compulsory licence.

Added:Recital 22: (22) Considering that voluntary agreements are the most suitable way to deal with patented products or processes in a time of crisis, prior to any decision by the Commission on the granting of a Union compulsory licence, the rights-holder should be provided with a reasonable opportunity to negotiate such agreement. A time period of four weeks should be sufficient to enable good faith and meaningful negotiations, taking into account the urgency of the situation. The rights-holder should also be given the opportunity to comment on the need for a Union compulsory licence and on the conditions of the licence, including remuneration, should it be granted. To this end, the rights-holder should be allowed to provide the Commission with written or oral comments and any information the rights-holder considers useful to allow the Commission to make a fair, comprehensive, and thorough assessment of the situation. The Commission should allow the rights-holder a reasonable period of time to provide comments and information, considering the balance to be struck between the public interest and the situation of the rights-holder, and considering the urgency of the situation. The comments of the rights-holder should, where relevant, be transmitted by the Commission to the competent advisory body on a timely basis. In order for confidential information to be shared with the Commission, the Commission shall ensure a safe environment for the sharing of this information and should take measures t…

Added:Recital 23: (23) The initiation of any compulsory licensing procedure should first involve the identification of the intellectual property rights concerned, the rights-holders concerned, as well as potential licensees, with the involvement of the national authorities responsible for issuing compulsory licenses under their national patent laws. It should be publicised by means of a notice published in the Official Journal of the European Union. .

Added:Recital 24: (24) The Commission should, assisted by the advisory body, identify in its decision the patent, patent application, supplementary protection certificate and utility model related to the crisis-relevant products, and the rights-holders of those intellectual property rights. In certain circumstances, the identification of intellectual property rights and of their respective rights-holders may require lengthy and complex investigations. The Commission should identify all applicable and relevant intellectual property rights and their rights-holder before granting the compulsory licence. The implementing act should identify any necessary safeguards and remuneration to be paid to each identified rights-holder.

Added:Recital 25: (25) Where the rights-holder or not all the rights-holders could be identified in a reasonable period of time, the Commission should not grant the Union compulsory licence.

Added:Recital 27: (27) The licensee should pay an adequate remuneration to the rights-holder as determined by the Commission. The amount of the remuneration should be determined considering the total gross revenue generated by the licensee from the pertinent activities governed by the Union compulsory licence, the economic value of the exploitation authorised under the licence to the licensee and to the Member States concerned by the crisis, any public support received by the rights-holder to develop the invention, the degree to which development costs have been amortized as well as humanitarian circumstances relating to the granting of the Union compulsory licence. The Commission should also consider the comments made by the rights-holder and the assessment made by the advisory body with regard to the amount of the remuneration.

Added:Recital 32 a (new): (32a) Where appropriate, the Commission should oblige the rights-holder to disclose the trade secrets which are strictly necessary in order to achieve the purpose of the Union compulsory licence. In such cases, rights holders should receive an adequate remuneration. It is possible that a detailed description of how to carry out the invention might not be sufficient and complete enough to enable the licensee to efficiently use that invention. This could encompass, without being exhaustively limited to, the comprehensive transfer of necessary technology, expertise, data, samples, and reference products essential for production and obtaining market authorisation in collaboration with the licensee, taking into account both the rights-holder and the licensee’s interests. In cases where that additional information and know-how is necessary, some of which is an undisclosed trade secret, the disclosure of that necessary trade secret, with a view to only achieving the purpose of exercising the Union compulsory licence pursuant to this Regulation, should be considered to be lawful within the meaning of Article 3(2) and Article 5 of Directive (EU) 2016/943 of the European Parliament and the Council. While this Regulation requires the disclosure of trade secrets only when they are strictly necessary in order to achieve the purpose of the Union compulsory licence, it should be interpreted in such a manner as to preserve the protection afforded to trade secrets under Directive (EU) 2016/94…

Added:Recital 32 b (new): (32b) This Regulation should guarantee that the Commission has the authority to oblige rights-holders to provide all necessary information to facilitate the rapid and efficient production of critical crisis-related products, such as pharmaceuticals and other health-related items. This information should encompass details about know-how, particularly when it is essential for the effective implementation of compulsory licensing. While patent licensing alone might suffice to enable other manufacturers to quickly produce simple pharmaceuticals, in case of more intricate pharmaceutical products, such as vaccines during a pandemic, it is often insufficient. Where it is essential for the implementation of the compulsory licence, an alternative producer will also require access to know-how.

Added:Recital 33: (33) In order to respond appropriately to the crisis situations, the Commission should be authorised to review the conditions of the Union compulsory licence and adapt them to changed circumstances. This should include the modification of the compulsory licence to indicate the complete list of rights and rights-holders covered by the compulsory licence. This should also include the termination of the licence if the circumstances which led to it cease to exist and are unlikely to recur. When deciding on the revision of the Union compulsory licence, the Commission should consult the competent advisory body for that purpose, as well as the rights-holders and licensees. If the Commission intends to change essential components of the Union compulsory licence, such as its duration or remuneration or if the change itself could be the subject of a separate compulsory licence, it should be required to consult the advisory body.

Added:Recital 34: (34) To prevent and stop any misuse of the Union compulsory licence, specific safeguards should be in place to allow the Commission to take action. In addition to the possibility to terminate the Union compulsory licence, the Commission should be authorised to impose fines and periodic penalty payments on the rights-holder and the licensee in order to enforce the obligations under this Regulation. The penalties should be effective, proportionate and dissuasive, and should not contravene the usual enforcement measures of intellectual property rights as provided by Directive 2004/48/EC.

Added:Recital 35: (35) Compliance with the relevant obligations imposed under this Regulation should be enforceable by means of fines and periodic penalty payments. To that end, appropriate levels of fines and periodic penalty payments should be laid down and the imposition of fines and periodic penalty payments should be subject to appropriate limitation periods in accordance with the principles of proportionality and ne bis in idem. All decisions taken by the Commission under this Regulation are subject to review by the Court of Justice of the European Union in accordance with the TFEU. The Court of Justice of the European Union should have unlimited jurisdiction in respect of the implementing act granting the compulsory licence, as well as the decisions on fines and penalty payments in accordance with Article 261 TFEU.

Added:Recital 37: (37) The possibility of a compulsory licence at Union level should not only be available for the supply of the Union market but also for export purposes concerning countries with public health problems, already regulated by Regulation (EC) No 816/2006 of the European Parliament and of the Council11. Under that Regulation, the granting of such compulsory licences is decided and performed nationally by the competent authorities of the Member States that have received a corresponding application from a person that intends to manufacture and sell pharmaceutical products covered by a patent or a supplementary protection for export to eligible third countries. Regulation (EC) No 816/2006 only allows compulsory licensing covering the manufacturing of products across several Member States through national procedures. In the context of a cross-border manufacturing process different national compulsory licences would be needed. This can lead to a burdensome and lengthy process as this would require the launch of different national procedures with possibly different scope and conditions. In order to achieve the synergies and efficient process as for the Union crisis mechanisms, a Union compulsory licence should also be available, in the context of Regulation (EC) No 816/2006. This should be further facilitated by reviewing the conditions for issuing compulsory licences for export, in order to make them fully in line with the TRIPS Agreement and its full spectrum of flexibilities. The Un…

Added:Recital 38: (38) In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred on the Commission as regards the granting, complementing, modification or termination of a Union compulsory license, the determination, in the absence of an agreement between the rights-holder and the licensee, of the remuneration to be paid to the rights-holder, the procedural rules for the ad hoc advisory body and the characteristics allowing the identification of products produced under a Union compulsory licence. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council12 . The advisory procedure should be used for the adoption of implementing acts granting, complementing, modifying or terminating a Union compulsory licence, and implementing acts determining the remuneration. The choice of the advisory procedure is justified given that those implementing acts would be adopted in the context of a procedure with considerable participation of the Member States through the consultation of the advisory body. The examination procedure should be used for the adoption of implementing acts establishing procedural rules for the ad hoc advisory body and implementing acts establishing the characteristics allowing the identification of products produced under a Union compulsory licence.

Added:Recital 40: (40) Union compulsory licensing for crisis management is a last resort tool that is used in exceptional circumstances. The evaluation should therefore be conducted only where a Union compulsory licence has been granted by the Commission. The evaluation report should be submitted by the last day of the third year following the granting of the Union compulsory licence, to allow an adequate and substantiated assessment of this Regulation.

Added:Recital 40 a (new): (40a) While the Annex is to be updated by any future legislative act in relation to an emergency or crisis mode, the Commission should nevertheless monitor the situation and assess whether the list in the Annex has been properly updated. If it appears that this list is no longer up-to-date, the Commission should assess its consequences. In any event, the Commission should submit its assessment to the European Parliament and the Council accompanied, where appropriate, by legislative proposals to amend the Annex. Although the Commission should carry out this assessment every two years from the date of entry into force of this Regulation, it is expected that, given the rapid changes in current European and global situation, the Commission should carry out that assessment without undue delay in the event of exceptional threats to public safety or to national security.

Added:Recital 41 a (new): (41a) Since the objective of this Regulation, namely to ensure access to crisis-relevant patented products needed to address crises in the internal market, cannot be sufficiently achieved by the Member States because of the fragmentation of compulsory licensing in the Union and the insufficient territorial scope of national compulsory licensing but can rather, by reason of the scale and effects of the necessary solution, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives.

Added:Article 1 – paragraph 1: This Regulation has the objective to ensure that a temporary and non-exclusive Union compulsory license may be granted to protect the public interest in the context of cross-border crisis or emergency situations in the Union. This Regulation lays down rules on the procedure and conditions for the granting as a last resort of a Union compulsory licence of intellectual property rights that are necessary for the supply of crisis-relevant products to the Member States in the context of a Union crisis or emergency mechanism. To this end, if no prior voluntary agreement has been reached within four weeks between right holder and licensee, the Commission may grant a Union compulsory license.

Added:Article 3 – paragraph 1 – point -a (new): (-a) ‘crisis mode or emergency mode’ means a crisis mode or an emergency mode, as applicable, listed in the Annex to this Regulation, which has been activated or declared in the context of a Union crisis or emergency mechanism listed in that Annex in accordance with one of the Union acts listed therein;

Added:Article 3 – paragraph 1 – point a: (a) ‘crisis-relevant products’ means products or processes that are indispensable for responding to a crisis or emergency or for addressing the impacts of a crisis or emergency in the Union and for which the granting of a compulsory license is the only means of ensuring the sufficient and timely availability and supply of such products or processes, as determined by the Commission through the guidance of the advisory body in accordance with Article 6;

Added:Article 4 – paragraph 1: The Commission may grant a Union compulsory licence in the event of a crisis mode or an emergency mode in case no voluntary agreement with a view to ensuring the supply of crisis-relevant products has been reached between right-holder and the potential licensee within four weeks.

Added:Article 5 – paragraph 1 – introductory part: 1. The Union compulsory license that may be granted by the Commission in accordance with Article 4 shall, notwithstanding the obligations pursuant to Article 10:

Added:Article 5 – paragraph 1 – point b: (b) have a strict limitation concerning scope, field of use, necessary quantities, and a duration that is fully in line with the specific purpose for which the compulsory licence is issued, as well as strictly linked to the scope and duration of the crisis or emergency mode under which it is granted within the Union;

Added:Article 5 – paragraph 1 – point c: (c) be strictly limited to the relevant and properly justified activities of crisis-relevant products in the Union;

Added:Article 5 – paragraph 1 – point d: (d) only be granted against payment of an adequate remuneration to the rights-holder determined in accordance with Article 9;

Added:Article 5 – paragraph 1 – point e: (e) be strictly limited to the precisely defined territory of the Union;

Added:Article 5 – paragraph 1 – point f a (new): (fa) clearly state that the licensee is responsible for any liability or warranties related to the production and distribution of crisis-relevant products, excluding the rights-holder from product liability claims.

Added:Article 6 – paragraph 2 – introductory part: 2. The advisory body referred to in paragraph 1 shall be the advisory body competent for the Union crisis or emergency mechanism as listed in Annex I to this Regulation (the ‘competent advisory body’). For the purposes of the present Regulation, the competent advisory body, which is to act in the public interest, shall assist and advise the Commission as regards the following tasks:

Added:Article 6 – paragraph 2 – point a a (new): (aa) the assessment of whether the obligation to give the rights-holder an opportunity to engage in negotiations for a voluntary agreement to be reached within four weeks, laid down in Article 4, has been complied with;

Added:Article 6 – paragraph 2 – point b a (new): (ba) the determination of crisis-relevant products;

Added:Article 6 – paragraph 2 – point f: (f) the identification and consultation of the representatives of right holders or their representatives as well as potential licensees and consulting other stakeholders and economic operators, including industry, academia and civil society;

Added:Article 6 – paragraph 4 – point a a (new): (aa) shall invite representatives of the European Parliament as observers to the relevant meetings of the advisory bodies, where possible under the applicable legal acts referred to in Annex;

Added:Article 6 – paragraph 4 – point b: (b) may invite representatives of the national authorities responsible for issuing compulsory licences under national laws, representatives of economic operators, potential licensees, stakeholder organisations, social partners and experts to attend meetings of the advisory body as observers.

Added:Article 6 – paragraph 5: 5. In the absence of any existing competent advisory body, the tasks referred to in paragraph 2 shall be performed by an ad hoc advisory body set up by the Commission (the ‘ad hoc advisory body’). The Commission shall chair the ad hoc advisory body and ensure its secretariat. The ad hoc advisory body shall be composed of representatives of the institutions and bodies of each Member State that exercise the competence to grant national compulsory licences under national law.

Added:Article 6 – paragraph 6: 6. The Commission shall adopt an implementing act laying down the rules of procedure for the ad hoc advisory body referred to in paragraph 5. The rules of procedure shall specify that the ad hoc advisory body shall not be set up for a period exceeding the duration of the crisis or emergency. The rules of procedure shall specify that the ad hoc advisory body shall enforce stringent safeguards to avoid any potential conflicts of interest, and to ensure accountability and transparency. That implementing act shall be adopted in accordance with the examination procedure referred to in Article 24 (3).

Added:Article 7 – paragraph 1 – point b a (new): (ba) the rights and interests of the rights-holder and the potential licensee;

Added:Article 7 – paragraph 1 – point b b (new): (bb) existing national compulsory licences reported to the Commission in accordance with Article 22 in order to avoid overlaps or a situation of overproduction;

Added:Article 7 – paragraph 2 a (new): 2a. The Commission shall take the utmost account of the opinion of the advisory body. Where the Commission does not follow the opinion of the advisory body, it shall explain the reasons for its decision to the advisory body, without prejudice to the Commission's powers under paragraphs 7 and 8 of this Article.

Added:Article 7 – paragraph 3 – introductory part: 3. Before issuing the opinion, the advisory body shall give the rights-holder and the licensee an opportunity to comment within a reasonable timeframe on:

Added:Article 7 – paragraph 3 – point a: (a) the possibility to promptly reach a voluntary licensing agreement with manufacturers on intellectual property rights for the purpose of manufacturing, using and distributing the crisis-relevant products and the fulfilment of the conditions referred to in Article 4(1a) for conducting meaningful negotiations for that purpose;

Added:Article 7 – paragraph 4: 4. The Commission shall identify and notify the rights-holder and the licensee as soon as possible of the fact that a Union compulsory licence may be granted. The Commission shall notify the rights-holders individually.

Added:Article 7 – paragraph 6: deleted / (deleted) / (deleted) / (deleted)

Added:Article 8 – paragraph 1 – point a: (a) the patent, patent application, supplementary protection certificate or utility model for which the licence is granted;

Added:Article 8 – paragraph 1 – point b: (b) the right-holder;

Added:Article 8 – paragraph 1 – point h: (h) measures complementing the compulsory licence, as referred to in Article 13a, including, where strictly necessary to achieve the objective of the compulsory licence, the obligation for the rights-holder to disclose trade secrets to the licensee when the conditions provided for in Article 13a (2) and (3) are fulfilled.

Added:Article 9 – paragraph 1 a (new): 1a. The rights-holder shall receive the remuneration within a pre-established timeframe as agreed with the Commission.

Added:Article 9 – paragraph 2: 2. The remuneration shall be determined based on the total gross revenue generated by the licensee from the pertinent activities governed by the Union compulsory licence.

Added:Article 9 – paragraph 3 – point d a (new): (da) the possible disclosure of trade secrets pursuant to Article 13a(2) and (3) and the relevant limitations to the protection of trade secrets according to Directive (EU) 2016/94; that disclosure shall give rise to adequate compensation for the rights-holder.

Added:Article 10 – paragraph 1 – subparagraph 1 – point a: (a) the number of crisis-relevant products manufactured under the Union compulsory licence does not exceed the defined quantities and what is necessary to meet the needs of the Union;

Added:Article 10 – paragraph 1 – subparagraph 1 – point c a (new): (ca) a detailed account of the products produced under the Union compulsory licence;

Added:Article 10 – paragraph 1 – subparagraph 1 – point c b (new): (cb) treat the information acquired in relation to the Union compulsory licence with utmost confidentiality, refraining, in particular, from making trade secrets available to a third party without the consent of the Commission, which should inform and consult the rights-holder in this regard;

Added:Article 10 – paragraph 1 – subparagraph 1 – point c c (new): (cc) implement all necessary measures to preserve the confidentiality of the rights-holder’s trade secrets, as ordered by the Commission pursuant to Article 13a(3);

Added:Article 10 – paragraph 1 – subparagraph 1 – point c d (new): (cd) do not use trade secrets disclosed pursuant to Article 13a(2) beyond the duration of the Union compulsory licence or for any other purpose than those considered as lawful uses under Article 13a(2);

Added:Article 10 – paragraph 2 – point a: (a) immediately terminate the Union compulsory licence in accordance with Article 14(3); or